Apple Inc. (NASDAQ:AAPL)’s China prospects are dwindling by the day as local handset manufacturers continue to undercut it on pricing as the race for market share heats up. While Xiaomi has been the one making waves as the tech giant’s biggest rival in the Chinese smartphone marketplace, the US Company may now have to worry about the threat posed by Oppo.
Oppo’s Immediate Threat
According to research firm IDC, Oppo led the three on total shipments in the third quarter having shipped 20.1 million devices. The Chinese company now controls 17.5% of the country’s smartphone market share.
“[..]Oppo was clear in its direction and focused on expanding its offline channels. It also had key strengths such as its VOOC fast-changing technology and in the elegant design of its phones. This, coupled with its aggressive marketing tactics, helped it succeed in the market,” said Xiaohan Tay, senior market analyst for Client Devices Research at IDC APAC
Apple China may have to rethink its strategy if it is to reclaim its top position having slipped to fifth with a 7.1% market share on shipping 8.2 million devices, in the third quarter. While many people may argue that iPhone maker decline to the fifth came prior to the release of iPhone 7, it still does not look good for the company in China.
Chinese handset makers led by Oppo, Vivo and Xiaomi continue to release devices with all the high-end features that consumers yearn for at subsidized prices. The same has not been the case for Apple, which is remaining tight on the pricing of its devices. While the release of iPhone 7 could help Apple move up the ladder, it still faces an uphill task to unsettle Oppo from the top spot as it continues to ask for a premium for its products.
In a bid to offset the losses in China Apple may have to shift its attention to other markets abroad where it can be able to sell its iPhones. When it comes to global shipments, the iPhone maker comes second to Samsung, which controls 20% of the total Market share. Huawei with 9.3% market share came in third.
IDC has however warned that Chinese handset makers could soon disrupt the status quo when it comes to global shipments given that they continue to develop devices with high-end features at lower prices. The same should be a big blow for Apple China, which is already grappling with a decline in iPhone sales in China.